Bord Gáis plans to buy electricity from the new Tynagh energy plant in Co Galway and the ESB plant at Coolkeeragh, Derry, as its key contract with the Synergen station in Ringsend, Dublin runs out.
A spokesman for the company yesterday described the contract with the Synergen plant as "ongoing", but it is understood that once the new plant at Tynagh comes into commercial operation the current contract with Synergen must end.
The Tynagh plant is expected to be ready for commercial operation in mid-February at the latest. Test firing of the gas-powered plant is taking place at present and electricity has been produced on a trial basis.
The Synergen contract provides crucial guaranteed access to electricity for Bord Gáis, which is trying to develop a large-scale electricity business.
At present it is the third-largest electricity supplier in the Republic. This business produced a turnover of €124 million in 2004.
ESB has a 70 per cent stake in the Synergen plant but, in order to reduce its dominance, the EU ordered the company in 2002 to sell most of the output from Ringsend to other market participants. Bord Gáis has been taking a large chunk of the 400 megwatts produced there since then.
The power from the Synergen plant has allowed the company to develop a viable electricity business. In 2004 it supplied more than 7 per cent of all electricity used in Ireland.
A spokesman for Bord Gáis said yesterday it was studying a number of options for securing electricity for the future.
For example it won rights to some power under an auction held by the Commission for Energy Regulation (CER) last year.
It also has investments in wind farms, which could boost supply in 2006. Bilateral arrangements with Tynagh and Coolkeeragh could also be utilised.
Despite this, the company is anxious to secure its own power station long term. Three years ago it bid for a contract to build the State's latest power station, but it was beaten, ironically, by the Tynagh consortium. A major stake in this plant, held by Turkish firm Gama, is currently up for sale, but Bord Gáis is not believed to be among shortlisted bidders.
If the company's need to secure supply becomes acute, another option it might consider is buying electricity via the north-south interconnector. However it will have to compete with other companies, including ESB, Viridian and Airtricity, for rights to use this asset.
In the last week it was revealed that the Coolkeeragh plant has been out of service since December 16th.
It is capable of producing over 400 megawatts of power and its loss to the system has created difficulties in Northern Ireland and, to a lesser degree, in the Republic.
The authorities in Northern Ireland have been forced at peak periods to import power from the Republic to make up for the loss of the Coolkeeragh plant. The ESB said this week it hoped the plant would be operational again by the middle of the month.
